Samsung Is Like A Race Car Driver In The Dark On A Winding Mountain, Hoping It Doesn't Crash

It’s been four long years since Apple introduced the iPad, its last major innovation in a product category.

If we’re being honest, in the four years since, no other company has released a category-defining consumer electronics hardware product. You could argue that Nest, with its Internet-connected thermostat, comes close, but the Nest isn’t a widespread mainstream consumer product like the iPhone or iPad.

Without Apple leading the way, it feels like the rest of the consumer hardware industry is lost, trying to figure what comes next after the tablet.

This was quite apparent at Mobile World Congress, the massive mobile industry trade show in Barcelona. The major companies were all making smart watches and fitness tracking devices, but none of them felt quite right.

Here’s how it works in the computing industry (and we’re paraphrasing Marc Andreessen): Apple invents a new product category and has 100% of the market, then everyone starts copying. Apple loses market share until it kills the product.

Think about the iPod getting copied by the Zune, then Apple eventually killing the iPod with the iPhone. Or, even earlier, inventing the Mac, getting copied by Microsoft and IBM, then (sort of) killing the Mac with the iPad. The iPhone hasn’t been killed, and probably never will be killed, but it has been copied.

Without Apple releasing an iWatch to copy, the companies with smart watches are lost.

All of the fitness tracking devices felt like they were being made just for the sake of being made. They felt like gadgets that were being tossed out because these companies are trying to figure out what’s next.

Nowhere is this more apparent than with Samsung.

Samsung launched the Gear 2, and the Gear Neo, which were quick follow ups to the Galaxy Gear, which was a massive flop with reviewers. It launched the Galaxy S5, which this year comes in gold and has a fingerprint scanner just like the iPhone 5S.

It also released the Gear Fit, which looked like a pretty decent fitness tracker.

As good as the Gear Fit looks, it’s still not quite right. And importantly, Samsung didn’t really answer the “why” question. Why do we need the Fit? What does it offer that our smartphones don’t already offer?

At MWC, we were chatting with Benedict Evans, an analyst with Andreessen Horowitz about this phenomenon. He didn’t disagree with our assertion that all of these big mobile technology companies were just missing that something with their new products.

He gave us an extended metaphor to describe Samsung.

Imagine there were a bunch of race cars driving in the dark on a winding mountain road without headlights, and without street lights. Each of the cars represent a different consumer technology company. For the longest time, Samsung was able to focus on the car in front of the pack, which knew where it was going. Over time, the other cars chasing the leader slipped and crashed off the mountain in the dark. Samsung stayed on the road.

Finally, Samsung passed the last car that was in front of it, Nokia, which slid off the road. It expected there was one more car in front, Apple, that it could follow so it could stay on the road. But once Samsung got to the front of the pack, it doesn’t see Apple. It suddenly realised that Apple was on another road altogether. And now Samsung has to navigate a dark and winding road entirely on its own.

That’s how we end up with the Gear, a sloppy product that exists for the sake of existing and doesn’t really work.

For Samsung, this a big problem. It became an industry leader by selling a lot of high-end smartphones. But, the high-end is slowing down. The low-end is growing, but Samsung can’t compete with an army of Chinese smartphone makers that sell smartphones for $US100.

As a result, Samsung is somewhat pinched. It’s racing in the dark, and it’s doing its best not to crash off the mountain.

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